The ever-changing supply chain industry has created an endless flow of new and developing technology. As technology transforms, your inventory and supply chain management needs to as well. Companies need to determine which processes are worth implementing into their supply chain. The newest process in the market that could potentially revolutionize the supply chain is blockchain.
Blockchain is popularly defined by Joe McKendrick as, “an online globally distributed general ledger that keeps track of transaction via online ‘smart contracts.’” So, how does it work?
Blockchain is a list of growing records referred to as ‘blocks’. These blocks are linked and secured utilizing cryptography, the process of constructing protocols to prevent third parties from accessing private messages. To connect blocks, a hash pointer is attached to each block as a timestamp and transaction data. Blockchain has the ability to open up any global transaction to millions of participants in the industries and has the potential to make your supply chain smarter and faster.
What makes blockchain different?
Blockchain is enhanced by electronic tracking technology which is proven to speed up supply chains. It continuously updates information in real-time, dissipating the need for other processes. Blockchain can be especially useful and powerful for smart contracts to secure the rights of signatories of documents or goods and services online. Blockchain is designed to make business processes more intelligent due to the trust and transparency that is distributed throughout. This type of transparency will bring more people into connected supply chain networks.
With blockchain, updates can be validated in a commonly shared ledger. Advantages of this distributed system include resolving problems with disclosure and accountability between individuals and institutions with whom interests may vary. Imported data can be updated in real time and will give each member and user the opportunity for real-time visibility into activity. This blockchain technology can reveal relevant information which will give the users the opportunity to attach, “…digital tokens—a unique, negotiable form of digital asset, modeled on bitcoin…” as told by Michael Casey and Pindar Wong. These digital tokens attach to intermediate goods as they move along the production, shipping and delivery phases of the supply chain and through the title as it passes between various players.
What will it do for your business?
A blockchain could give businesses an immense amount of flexibility to find new markets and price risk. This creates a dynamic demand chain instead of a rigid supply chain, resulting in more abundant, efficient resources for everyone. Blockchain also keeps staff and supervisors from different vendors in check. They can be granted unique, cryptographic permissions, which appear to be special and traceable identifiers. Other members of the supply chain community are able to monitor the activity of each other’s credentialed staff.
Blockchain can potentially bring efficient improvements to further expedite the supply chain at the point where business happens. Although there are a few challenges within this new development, it has been argued that this can improve the supply chain for accuracy and credibility.